Florida Statutes 607.1106 – Effect of merger or share exchange
Current as of: 2024 | Check for updates
|
Other versions
(1) When a merger becomes effective:
(a) The domestic or foreign eligible entity that is designated in the plan of merger as the survivor continues or comes into existence, as the case may be;
Terms Used In Florida Statutes 607.1106
- Acquired eligible entity: means the domestic or foreign eligible entity that will have all of one or more classes or series of its shares or eligible interests acquired in a share exchange. See Florida Statutes 607.01401
- Appraisal: A determination of property value.
- Articles of incorporation: includes original, amended, and restated articles of incorporation, articles of share exchange, and articles of merger, and all amendments thereto. See Florida Statutes 607.01401
- Assets: (1) The property comprising the estate of a deceased person, or (2) the property in a trust account.
- Bequest: Property gifted by will.
- Contract: A legal written agreement that becomes binding when signed.
- Corporation: A legal entity owned by the holders of shares of stock that have been issued, and that can own, receive, and transfer property, and carry on business in its own name.
- Devise: To gift property by will.
- Domestic: means , with respect to an entity, an entity governed as to its internal affairs by the laws of this state. See Florida Statutes 607.01401
- domestic corporation: means a corporation for profit, which is not a foreign corporation, incorporated under this chapter. See Florida Statutes 607.01401
- Eligible entity: means :1. See Florida Statutes 607.01401
- Eligible interests: means interests or memberships. See Florida Statutes 607.01401
- Entity: includes corporation and foreign corporation; unincorporated association; business trust, estate, limited liability company, partnership, trust, and two or more persons having a joint or common economic interest; and state, United States, and foreign governments. See Florida Statutes 607.01401
- Foreign: means , with respect to an entity, an entity governed as to its internal affairs by the organic law of a jurisdiction other than this state. See Florida Statutes 607.01401
- Foreign corporation: means an entity incorporated or organized under laws other than the laws of this state which would be a corporation for profit if incorporated under the laws of this state. See Florida Statutes 607.01401
- Gift: A voluntary transfer or conveyance of property without consideration, or for less than full and adequate consideration based on fair market value.
- Governor: means :
(a) A director of a corporation for profit;(b) A director or trustee of a nonprofit corporation;(c) A general partner of a general partnership;(d) A general partner of a limited partnership;(e) A manager of a manager-managed limited liability company;(f) A member of a member-managed limited liability company;(g) A director or a trustee of a real estate investment trust; or(h) Any other person under whose authority the powers of an entity are exercised and under whose direction the activities and affairs of the entity are managed pursuant to the organic law and organic rules of the entity. See Florida Statutes 607.01401- Interest: means :
(a) A share in a corporation for profit;(b) A membership in a nonprofit corporation;(c) A partnership interest in a general partnership, including a limited liability partnership;(d) A partnership interest in a limited partnership, including a limited liability limited partnership;(e) A membership interest in a limited liability company;(f) A share or beneficial interest in a real estate investment trust;(g) A member's interest in a limited cooperative association;(h) A beneficial interest in a statutory trust, business trust, or common law business trust; or(i) A governance interest or distributional interest in another entity. See Florida Statutes 607.01401- Interest holder: means :
(a) A shareholder of a corporation for profit;(b) A member of a nonprofit corporation;(c) A general partner of a general partnership;(d) A general partner of a limited partnership;(e) A limited partner of a limited partnership;(f) A member of a limited liability company;(g) A shareholder or beneficial owner of a real estate investment trust;(h) A beneficiary or beneficial owner of a statutory trust, business trust, or common law business trust; or(i) Another direct holder of an interest. See Florida Statutes 607.01401- Interest holder liability: means :
(a) Personal liability for a liability of an entity which is imposed on a person:1. See Florida Statutes 607.01401- Liabilities: The aggregate of all debts and other legal obligations of a particular person or legal entity.
- Merger: means a transaction pursuant to…. See Florida Statutes 607.01401
- Obligation: An order placed, contract awarded, service received, or similar transaction during a given period that will require payments during the same or a future period.
- Organic law: means the laws of the jurisdiction in which the entity was formed. See Florida Statutes 607.01401
- Organic rules: means the public organic record and private organic rules of an entity. See Florida Statutes 607.01401
- Party to a merger: means any domestic or foreign entity that will merge under a plan of merger. See Florida Statutes 607.01401
- Person: includes an individual and an entity. See Florida Statutes 607.01401
- Proceeding: includes a civil suit, a criminal action, an administrative action, and an investigatory action. See Florida Statutes 607.01401
- Real property: Land, and all immovable fixtures erected on, growing on, or affixed to the land.
- Secretary: means the corporate officer to whom the board of directors has delegated responsibility under…. See Florida Statutes 607.01401
- Service of process: The service of writs or summonses to the appropriate party.
- Share exchange: means a transaction pursuant to…. See Florida Statutes 607.01401
- Shares: means the units into which the proprietary interests in a corporation are divided. See Florida Statutes 607.01401
(b) The separate existence of every domestic or foreign eligible entity that is a party to the merger, other than the survivor, ceases;(c) All real property and other property, including any interest therein and all title thereto, owned by, and every contract right possessed by, each domestic or foreign eligible entity that is a party to the merger, other than the survivor, become the property and contract rights of and become vested in the survivor, without transfer, reversion, or impairment;(d) All debts, obligations, and other liabilities of each domestic or foreign eligible entity that is a party to the merger, other than the survivor, become debts, obligations, and liabilities of the survivor;(e) The name of the survivor may be, but need not be, substituted in any pending proceeding for the name of any party to the merger whose separate existence ceased in the merger;(f) Neither the rights of creditors nor any liens upon the property of any corporation party to the merger shall be impaired by such merger;(g) If the survivor is a domestic eligible entity, the articles of incorporation and bylaws or the organic rules of the survivor are amended to the extent provided in the plan of merger;(h) The articles of incorporation and bylaws or the organic rules of a survivor that is a domestic eligible entity and is created by the merger become effective;(i) The shares, obligations, and other securities (and the rights to acquire shares, obligations, or other securities) of each domestic or foreign corporation party to the merger, and the eligible interests in any other eligible entity that is a party to the merger, that are to be converted in accordance with the terms of the merger into shares or other securities; eligible interests; obligations; rights to acquire shares, other securities, or eligible interests; cash; other property; or any combination of the foregoing, are converted, and the former holders of such shares, obligations, other securities, and eligible interests (and the rights to acquire shares, obligations, other securities, or other eligible interests) are entitled only to the rights provided to them by those terms of the merger or to any rights they may have under s. 607.1302 or under the organic law governing the eligible entity;(j) Except as provided by law or the plan of merger, all the rights, privileges, franchises, and immunities of each eligible entity that is a party to the merger, other than the survivor, become the rights, privileges, franchises, and immunities of the survivor; and(k) If the survivor exists before the merger:1. All the property and contract rights of the survivor remain its property and contract rights without transfer, reversion, or impairment;2. The survivor remains subject to all of its debts, obligations, and other liabilities; and3. Except as provided by law or the plan of merger, the survivor continues to hold all of its rights, privileges, franchises, and immunities.(2) When a share exchange becomes effective, the shares, eligible interests, and rights to acquire shares or eligible interests in the acquired eligible entity that are to be exchanged in accordance with the terms of the share exchange for:(a) Shares or other securities;(b) Eligible interests;(c) Obligations;(d) Rights to acquire shares, other securities, or eligible interests;(e) Cash;(f) Other property; or(g) Any combination of the foregoingare entitled only to the rights provided to them by the terms of the share exchange, or to any rights they may have under s. 607.1302 or the organic law governing the acquired eligible entity.
(3) Except as otherwise provided in the articles of incorporation of a domestic corporation or the organic law governing or organic rules of a domestic or foreign eligible entity, the effect of a merger or share exchange on interest holder liability is as follows:(a) A person who becomes subject to new interest holder liability in respect of an eligible entity as a result of a merger or share exchange shall have that new interest holder liability only in respect of interest holder liabilities that arise after the merger or share exchange becomes effective.(b) If a person had interest holder liability with respect to a party to the merger or the acquired eligible entity before the merger or share exchange becomes effective with respect to shares or eligible interests of such party or acquired entity which were exchanged in the merger or share exchange, which were canceled in the merger, or the terms and conditions of which relating to interest holder liability were amended pursuant to the merger:1. The merger or share exchange does not discharge that prior interest holder liability with respect to any interest holder liabilities that arose before the merger or share exchange becomes effective.2. The provisions of the organic law governing any eligible entity for which the person had that prior interest holder liability shall continue to apply to the collection or discharge of any interest holder liabilities preserved by subparagraph 1. as if the merger or share exchange had not occurred.3. The person shall have such rights of contribution from other persons as are provided by the organic law governing the eligible entity for which the person had that prior interest holder liability with respect to any interest holder liabilities preserved by subparagraph 1. as if the merger or share exchange had not occurred.4. The person shall not, by reason of such prior interest holder liability, have interest holder liability with respect to any interest holder liabilities that arise after the merger or share exchange becomes effective.(c) If a person has interest holder liability both before and after a merger becomes effective with unchanged terms and conditions with respect to the eligible entity that is the survivor by reason of owning the same shares or eligible interests before and after the merger becomes effective, the merger has no effect on such interest holder liability.(d) A share exchange has no effect on interest holder liability related to shares or eligible interests of the acquired eligible entity that were not exchanged in the share exchange.(4) Upon a merger becoming effective, a foreign eligible entity that is the survivor of the merger is deemed to:(a) Appoint the secretary of state as its agent for service of process in a proceeding to enforce the rights of shareholders of each domestic corporation that is a party to the merger who exercise appraisal rights; and(5) Except as provided in the organic law governing a party to a merger or in its articles of incorporation or organic rules, the merger does not give rise to any rights that an interest holder, governor, or third party would have upon a dissolution, liquidation, or winding up of that party. The merger does not require a party to the merger to wind up its affairs and does not constitute or cause its dissolution or termination.(6) Property held for a charitable purpose under the law of this state by a domestic or foreign eligible entity immediately before a merger becomes effective may not, as a result of the transaction, be diverted from the objects for which it was donated, granted, devised, or otherwise transferred except and only to the extent permitted by or pursuant to the laws of this state addressing cy pres or dealing with nondiversion of charitable assets.(7) A bequest, devise, gift, grant, or promise contained in a will or other instrument of donation, subscription, or conveyance which is made to an eligible entity that is a party to a merger that is not the survivor and which takes effect or remains payable after the merger inures to the survivor.(8) A trust obligation that would govern property if the property is directed to be transferred to a nonsurviving eligible entity will apply to property that is to be transferred instead to the survivor after a merger becomes effective.